Poverty, privilege and a cosmopolitan upbringing: Osborne in his own words

At the start of a three-day Guardian series, the shadow chancellor explains how he differs from his boss

George Osborne, shadow chancellor in his office at the House of Commons, with a framed copy of the front page of the Evening Standard newspaper about Alistair Darling, the 'Tory tax thief'. Photograph: David Levene David Levene/Guardian

The three generations of the Osborne family who spent their summer holiday together last month presented a lively sight. Sir Peter Osborne, the 17th baronet in a line stretching back to the reign of Charles I in 1629, found himself with a ringside seat as his wife and heir locked horns over the issue that has divided families across the world.

The subject of the war in Iraq disrupted the family holiday when Osborne's son, George, mounted a passionate defence of the war in the face of strong opposition from his mother.

"I still have rows with my mother about the Iraq war," Osborne says. Felicity Loxton-Peacock, noted debutante, anti-Vietnam war protester and former deli owner, feels particularly strongly on the war from her experience as an Amnesty International desk officer, he adds. "Her area was the Kurds, dealing with the brutality of Saddam Hussein's regime - a point I make to her when we discuss the Iraq war." The Osborne family row shows that the man who is certain to be chancellor if David Cameron's Conservatives win the next election is cut from a different cloth from traditional grand Tories. His family are multimillionaires - his father founded the successful wallpaper firm Osborne & Little - but there was no hunting, shooting and fishing, and his parents voted Labour until the arrival of Margaret Thatcher.

"I came from a privileged background and I went to a very good school, St Paul's," Osborne, 37, tells the Guardian in an interview in his Commons office overlooking the Thames. "But it was a very cosmopolitan and metropolitan upbringing. I was brought up in the centre of London and that was my world. It's not a life of sort of landed estates. My parents' set of friends operate in the interior design world, so they are journalists, writers and art dealers." His metropolitan background provides an intriguing backdrop to a relationship that may well shape Britain for the next decade.

He talks openly of how his upbringing contrasts with the landed country background of David Cameron, the son of a stockbroker who grew up in Oxfordshire. "There are differences and we had different upbringings," he says.

The contrasts between the two are being picked over by opponents who hope they will follow the example of Tony Blair and Gordon Brown, whose relations slowly became poisoned. Osborne and Cameron do have disagreements; as a passionate Atlanticist, the shadow chancellor still stands by his decision to vote for the Iraq war in 2003, while the Tory leader is racked by doubts over his yes vote.

Osborne tells the Guardian that the Tories' introduction of section 28, the law banning the promotion of homosexuality in schools, was "antediluvian". Cameron took some time to come round to this view and voted for its retention as late as 2003. The two also voted on opposite sides in a divisive Commons vote in May.

Osborne voted on liberal lines on abortion and on allowing lesbian couples to have IVF treatment. Cameron voted to cut the upper limit on abortion from 24 to 20 weeks and to make IVF clinics consider the "need for a father and a mother" before allowing women to begin fertility treatment. "I am a social liberal, but I do approach these issues on their merits," Osborne says.

There were suggestions recently that Osborne felt uneasy about Cameron's pledge to recognise marriage in the tax system. He rejects this, saying: "We will recognise marriage in the tax system."

He adds that he considers it the best environment for raising children, but makes it clear that unmarried parents will not lose out: "I hope a Conservative government will be able to offer things for everyone." Sharing the same view as Cameron on marriage, according to

Osborne, is an example of how they agree on the "big things", as he rejects comparisons with Blair and Brown.

Friendship with Cameron

"My relationship with David Cameron first of all is built on personal friendship - we are godparents to each other's children," he says. "I didn't want the job [of party leader]. That is the biggest obvious difference [with Blair and Brown]." The friendship was cemented last year when they held their nerve in the face of Gordon Brown's popularity "bounce" after he succeeded Tony Blair.

Amid speculation that Cameron could be ousted if he lost a snap election, the pair planned a series of measures unveiled at the last Conservative conference. They proved so popular that Brown abandoned his election plan.

They hope to maintain that spirit by showing the Tories offer more than catchy slogans, such as "Vote Blue Go Green", and that they too are prepared for the consequences of a prolonged economic downturn. Osborne jokes that he has had a personal taste of the changing economic climate. "I have the remortgage papers on my desk," he says. "The mortgage costs have gone up, not the actual mortgage."

The state of the economy prompts him to sympathise with the current chancellor. "I had some sympathy that Alistair Darling was trying to tell the truth," he says of the chancellor's remarks in the Guardian that Britain and the world were facing "arguably the worst" economic conditions in 60 years. "Nevertheless he's the chancellor, and he needs to command public confidence in his ability to manage economic policy. "I don't think he commands public confidence at the moment."

These remarks show how Osborne plans to use the parlous state of the economy to pile pressure on the government, and to assess his economic plans with care. Describing how Britain's large budget deficit has placed a "straitjacket" round the economy, he says: "One of the things we are very conscious of is that we are probably going to inherit a complete economic mess ... I think we will be shocked by the state of the books when we get there."

The Tories are drawing up a new "fiscal framework", he says - rules governing how the government raises and spends money. If they are well received, they may answer one of the main criticisms levelled at him: that his instinct is to go for the political jugular in the short term without thinking through the political consequences.

For example, it is widely accepted in Tory circles that Vince Cable, the Liberal Democrat Treasury spokesman, made a better fist of the Northern Rock crisis by campaigning for what became inevitable: its nationalisation. Osborne opposed this from the outset, so that he could portray such a move as a return by Labour to its socialist roots.

Osborne says he accepts that the downturn has consequences for the Tories. "That obviously forces us to think very hard about the difficult decisions we're going to have to take as an incoming government," he says.

This more cautious approach is likely to prompt complaints from Tory rightwingers who want immediate tax cuts. Osborne dismisses what he has called their "siren" calls as he pledges to follow the path of their heroine, who took eight years to reduce the share of national income taken by the state to below the level she inherited. "Margaret Thatcher wrestled with very difficult decisions and she was much more flexible and realistic than is sometimes portrayed," he says. But there will be no slashing of public spending. "The Tory party is not there to impose impossible public expenditure cuts in an economic downturn: that's not what we believe in." The Conservatives now regard themselves as the greatest champions of progressive politics in Britain. Highlighting the depth of the change in their thinking, Osborne says it is right to tackle "relative poverty", how people's wealth relates to the average, rather than concentrating just on "absolute poverty", simply providing a safety net to catch the poorest.

Helping the underclass

"I don't think it makes for a happy or strong society to know there are people so much poorer than your kind of average middle class, that there is an underclass. Whilst they may not be without food, without shelter - the classic kind of Victorian definitions of poverty - they are so lacking in opportunity and aspiration that it is a scar on society. I think the real job is to raise their opportunities and aspirations, and worry less about the hedge fund manager or the premier league footballer. That's the great challenge of our age."

Osborne uses poverty to make a wider point - that he thinks the Tories are better placed to tackle issues normally associated with Labour. "Gordon Brown thought the answer was to give people more money. We would argue the causes of poverty are much more complicated than that. It is about family breakdown, failing schools, poor healthcare, and lack of opportunity. This claim we make, that progressive goals are best achieved now by Conservative means, is something we are quite proud of."

Osborne talks of one of the most important goals at the heart of the Cameron project: to speed up the Blairite process of giving the private sector, charities and voluntary groups greater involvement in delivering public services. "You get a level of innovation that is lacking in very large public bureaucracies," he says. "Sometimes in public sector organisations you're more concerned that you properly account for how money is spent, rather than whether the money is actually effective, whereas a private or voluntary sector organisation will be concerned with the outcome and the result."

He believes that the Tories have the armoury to protect themselves against the sort of Brown onslaught that destroyed William Hague in 2001. Osborne should know: he was Hague's political secretary at the time.

"We sat in a little office, we could tell you about poll leads. At one point the government had a 40% poll lead. So I don't know what Gordon Brown is complaining about," he says. Labour were 15 points behind the Tories in the most recent Guardian/ICM poll. At this moment, Osborne looks at his most prized memento: a fake Newcastle Brown ale with the label "Bottler Brown", mocking his decision last autumn not to hold an election.